-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bjq7/wksG+uMtUlso6lDTdoIcJ2ztiTGodkd5bHZ8UgAtlj09HLI87GL/kkuNqov R/cjWCw5a9vKnpePqUYNrw== 0000914120-94-000002.txt : 19940629 0000914120-94-000002.hdr.sgml : 19940629 ACCESSION NUMBER: 0000914120-94-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM DAILY DIVIDEND TRUST CENTRAL INDEX KEY: 0000081248 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046386436 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02608 FILM NUMBER: 94535795 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A-14 LEGAL DEPARTMENT CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921536 MAIL ADDRESS: STREET 1: MAILSTOP A-14 LEGAL DEPARTMENT STREET 2: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 N-30D 1 DAILY DIVIDEND TRUST - SEMIANNUAL REPORT Putnam Daily Dividend Trust [Artwork] SEMIANNUAL REPORT April 30, 1994 [Putnam Logo] Boston * London * Tokyo PERFORMANCE HIGHLIGHTS "When one sector of the market performs poorly, another sector may offset the losses. To diversify a fund portfolio, split your holdings among domestic and international stocks and bonds, and money market funds." - - "Reducing your risk," Success (January/February 1994) "Our strategy is to take advantage of higher interest rates. At the same time, we will continue to follow a conservative investment approach, maintaining the fund's superior quality and stability." - - Lindsey Callen, Portfolio Manager Performance should always be considered in light of a fund's investment strate- gy. Putnam Daily Dividend Trust is designed for investors seeking current income with capital preservation, stable principal, and liquidity through a money mar- ket fund. SEMIANNUAL RESULTS AT A GLANCE Six months ended 4/30/94 Class A Class B - ------------------------------------------------------------------------------- Total return NAV NAV (change in value plus reinvested earnings) 1.39% 1.12% Current return: NAV NAV (end of period) Current rate(1): 3.33% 2.75% Current 30-day SEC yield (1) 3.17% 2.59% Distributions: Income Total Class A $0.013820 $0.013820 Class B $0.011151 $0.011151 - ------------------------------------------------------------------------------- (1) The Performance data represent past results. For performance over longer periods, see pages 6 and 7. The 7-day and 30-day yields are the two most common gauges for measuring money market mutual fund performance and are calculated in accordance with SEC guidelines. FROM THE CHAIRMAN [Photograph of George Putnam] *(C) Karsh, Ottowa Dear Shareholder: Many shareholders have been asking us whether we think the volatility that hit the securities markets in February and March was a prelude to further decline during the rest of 1994. We have been pointing out that we believe the recent adjustments in the markets are a natural occurrence at this stage of the econo- mic recovery. Some volatility will likely continue for a while as investors digest new reali- ties in areas such as interest rates, inflation, and the pace of the recovery. But the economy is still strong, interest rates remain historically low and in- flation appears under control. In our view, overall prospects for the long term are still positive. Seasoned investors know there will occasionally be periods of rough going. But experience has also taught them that long-term investment programs should rarely be altered in response to short-term events. In the report that follows, Lindsey Callen, the fund's manager, discusses the performance of Putnam Daily Dividend Trust in this market environment. Respectfully yours, George Putnam June 15, 1994 * (C) Copyright. REPORT FROM THE FUND MANAGER LINDSEY M. CALLEN For the semiannual period ended April 30, l994, Putnam Daily Dividend Trust once again delivered competitive performance, continuing to produce a steady stream of income. During this period, your fund operated in an environment of strong economic growth, low inflation, and rising interest rates. After months of steadily declining rates that fed the economic recovery, the Federal Reserve Board began taking steps to curb what it perceived as the possibility of rising inflation in the wake of too-rapid growth. Beginning in February, the Fed raised interest rates three times within a three- month period, boosting the Federal Funds Rate, the interest rate banks charge each other for overnight loans, from 3.00% to 3.75%. This action, which effec- tively raised all short-term interest rates, ultimately led the rise in short- term rates to 4.25%. CAPITALIZING ON HIGHER INTEREST RATES After interest rates sank to historic lows last fall, we began anticipating a reversal of the trend. We started positioning the fund to take advantage of incrementally higher yields. We achieved this objective mainly by shortening the portfolio's average maturity so the fund would not be locked into lower- yielding securities in a rising interest rate environment. We also increased the number of floating-rate securities. Interest rates on these securities are reset at fixed intervals (weekly or monthly), so that when market rates rise, inves- tors promptly benefit. In addition, investments in your fund include certificates of deposit of large banks and commercial paper; that is, the short-term debt of large U.S. and fo- reign corporations. In the investment spectrum, these are generally the safest, most stable short-term securities available. All money market investments are U.S. dollar denominated, so when we refer to foreign debt, we mean debt of do- mestic subsidiaries of foreign banks and/or corporations issued in the United States. MAINTAINING PORTFOLIO QUALITY Superior portfolio quality is one of your fund's most important attributes. Ideally, every holding must be rated in one of the two highest categories by at least two nationally recognized rating services. If only one rating service has rated the security, it must be in one of the highest two categories rated by that service. If the securities are unrated, Putnam Management must judge them to be of equivalent quality. In addition, we continually monitor the quality of each investment as long as it remains in the portfolio, making sure it provides a balance of attractive yield and relative stability. We also scrutinize market trends and factors that could affect the financial strength of each security's issuer, working to ensure the continued high credit quality of every portfolio holding. LOOKING AHEAD We believe the Fed will continue its anti-inflation policy by periodically rai- sing short-term interest rates. While the Fed has already made several moves in this direction, interest rates are still relatively low, and we do not anti- cipate that rates will return to the extremely high levels of the 1970s and early l980s. While incrementally higher rates may result in a modest slowdown in the economy, our long-term outlook anticipates stronger economic growth with relatively low inflation. - ------------------------------------------------------------------------------- PERFORMANCE COMPARISONS (4/30/93)* Current return: Passbook savings account 2.00% Putnam Daily Dividend Trust (7-day yield) Class A 3.33 Class B 2.75 Average taxable money market fund 7-day yield 3.13 3-month certificate of deposit 2.70 - ------------------------------------------------------------------------------- The principal value of money market mutual funds is uninsured and designed to be fixed while distributions vary daily. The principal value on passbook savings and bank CDs are generally insured up to certain limits by state and federal agencies. Unlike money market funds, early withdrawals from bank CDs may be sub- ject to substantial penalties. Investment returns will fluctuate. * Sources: Bank of Boston (passbook savings), Bank Rate Monitor (3-month CDs), IBC/Donaghue's Money Fund Report (taxable money market fund 7-day yield). PERFORMANCE SUMMARY This section provides, at a glance, information about your fund's performance. Total return shows how the value of the fund's shares changed over time, assum- ing you held the shares through the entire period and reinvested all distribu- tions back into the fund. We show total return in two ways: On a cumulative long-term basis and how the fund might have grown each year, on average, over varying periods. For comparative purposes, we show how the fund performed rela- tive to appropriate indexes and benchmarks. TOTAL RETURN FOR PERIODS ENDING 4/30/94 Lipper Class A Class B(1) Money Mkt. NAV NAV Fund Avg. CPI - ------------------------------------------------------------------------ 6 months 1.39% 1.12% 1.34% 1.17 - ------------------------------------------------------------------------ 1 year 2.65 2.12 2.64 2.36 - ------------------------------------------------------------------------ 5 years 28.81 -- 28.76 19.74 Annual average 5.19 -- 5.19 3.67 - ------------------------------------------------------------------------ 10 years 84.36 -- 84.48 42.97 Annual average 6.31 -- 6.32 3.64 - ------------------------------------------------------------------------ Life of class B -- 4.68 5.62 5.66 Annual average -- 2.30 2.76 2.78 - ------------------------------------------------------------------------ TOTAL RETURN FOR PERIODS ENDING 3/31/94 (MOST RECENT CALENDAR QUARTER) Class A Class B(1) NAV NAV - ------------------------------------------------------------------------ 6 months 1.35% 1.09% - ------------------------------------------------------------------------ 1 year 2.59 2.06 - ------------------------------------------------------------------------ 5 years 29.40 -- Annual average 5.29 -- - ------------------------------------------------------------------------ 10 years 84.36 -- Annual average 6.37 -- - ------------------------------------------------------------------------ Life of class B -- 4.46 Annual average -- 2.29 - ------------------------------------------------------------------------ (1) Effective April 27, 1992, the fund began offering class B shares. Performance for each share class will differ. Performance data represent past results and should not be taken as assu- rance of future performance. Investment returns of the fund will fluctuate. An investment in the fund is neither insured nor guaranteed by the U.S. go- vernment. There can be no assurance that the fund will be able to maintain a stable net asset value of $1.00 per share. However, since the fund's in- ception on October 1, 1976, no investor has ever lost a penny of principal. TERMS AND DEFINITIONS CLASS A shares generally are fund shares purchased with an initial sales charge. In the case of your fund, which has no sales charge, the reference is to shares purchased or acquired through the exchange of class A shares from another Putnam fund. Exchange of your fund's class A shares into another fund may involve a sa- les charge, however. CLASS B shares generally are fund shares purchased with no initial sales charge but subject to a contingent deferred sales charge (CDSC) on redemption. However, class B shares of your fund can be acquired only through exchange of class B shares from another Putnam fund. They are subject to the same CDSC schedule as the fund from which they were exchanged. NET ASSET VALUE (NAV) is the value of all fund assets, minus liabilities, divi- ded by the number of outstanding shares. It does not include any initial or con- tingent deferred sales charges. COMPARATIVE BENCHMARKS LIPPER MONEY FUND AVERAGE, used for performance comparison purposes, is an arithmetic average of the total return of all money market mutual funds tracked by Lipper Analytical Services. Lipper is an independent rating organization for the mutual fund industry. Lipper rankings vary for other periods. The fund's holdings do not match those in the Lipper Average. CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation. It does not represent an investment return. THE PUTNAM FUND SELECTOR (TM)* The Putnam Fund Selector shows the many opportunities for investors within every investment strategy. All investors should first accumulate a base of con- servative, cash-equivalent investments. Then, with the help of your investment advisor, diversify your portfolio by investing in the Putnam Family of Funds. (Pyramid graphic) Risk/Reward PUTNAM GROWTH FUNDS PUTNAM GROWTH AND INCOME FUNDS PUTNAM INCOME OR TAX-FREE INCOME FUNDS MOST CONSERVATIVE INVESTMENTS * (TM) Trademark. PUTNAM GROWTH FUNDS Asia Pacific Growth Fund Diversify Equity Trust Energy-Resources Trust Europe Growth Fund Global Growth Fund Health Sciences Trust Investors Fund New Opportunities Fund OTC Emerging Growth Fund Overseas Growth Fund Vista Fund Voyager Fund PUTNAM GROWTH AND INCOME FUNDS Convertible Income-Growth Trust Dividend Growth Fund Equity Income Fund The George Putnam Fund of Boston The Putnam Fund for Growth and Income Managed Income Trust Utilities Growth and Income Fund PUTNAM INCOME FUNDS Adjustable Rate U.S. Government Fund American Government Income Fund Balanced Government Fund Corporate Asset Trust Diversified Income Trust Federal Income Trust Global Governmental Income Trust High Yield Advantage Fund High Yield Trust Income Fund U.S. Government Income Trust PUTNAM TAX-FREE INCOME FUNDS Intermediate Tax Exempt Fund Municipal Income Fund Tax Exempt Income Fund Tax-Free High Yield Fund Tax-Free Insured Fund State tax-free income funds* Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania LIFESTAGE (SM) FUNDS Putnam Asset Allocation Funds - three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments to help maximize your return and reduce your risk. The three portfolios: Putnam Asset Allocation: Balanced Portfolio Putnam Asset Allocation: Conservative Portfolio Putnam Asset Allocation: Growth Portfolio MOST CONSERVATIVE INVESTMENTS + Putnam money market funds: Daily Dividend Trust New York Tax-Exempt Money Market Fund Tax Exempt Money Market Fund CDs and savings accounts ++ * Not available in all states. + Relative to above. ++ Not offered by Putnam Investments. Certificates of deposit offer a fixed rate of return and may be insured, up to certain limits, by federal/state agencies. Savings accounts may also be insured up to certain limits. Please call your financial advisor or Putnam to obtain a prospectus for any Putnam fund. It contains more complete information, including charges and expenses. Read it carefully before you invest or send money. PORTFOLIO OF INVESTMENTS OWNED April 30, 1994 (Unaudited) COMMERCIAL PAPER(80.8%)(a) Principal Amount Value DOMESTIC (58.5%) - ------------------------------------------------------------------------------- $ 18,077,000 AES Barbers (Letter of Credit (LOC), Bank of America) 3.85s 5/26/94 $ 18,024,803 25,000,000 AES Barbers (LOC, Bank of America) 3.85s 5/20/94 24,946,528 30,000,000 AT&T Capital Corp. 3.94s 7/7/94 29,776,733 20,000,000 Bankers Trust New York Corp. 4s 9/6/94 19,713,333 15,000,000 Bankers Trust New York Corp. 3.34s 7/6/94 14,906,758 40,000,000 Bell Atlantic Financial Services, Inc. 3.75s 5/4/94 39,983,333 14,000,000 Bell Atlantic Network Funding Corp. 3.82s 5/23/94 13,965,832 14,100,000 Champion Realty (LOC, Texas Commerce Bank) 3.8s 5/4/94 14,094,047 20,000,000 Ciesco, L.P. 3.85s 6/6/94 19,920,861 25,000,000 Ciesco, L.P. 3.62s 5/2/94 24,994,972 15,000,000 Corporate Asset Funding Co., Inc. 3.80s 5/19/94 14,969,917 15,000,000 Corporate Asset Funding Co., Inc. 3.09s 5/3/94 14,996,138 8,000,000 Corporate Receivables Corp. 4.1s 7/11/94 7,934,400 12,000,000 Corporate Receivables Corp. 3.95s 7/6/94 11,911,783 14,500,000 Corporate Receivables Corp. 3.62s 5/4/94 14,494,168 13,439,000 Delaware Funding Corp. 3.95s 6/9/94 13,380,018 6,532,000 Delaware Funding Corp. 3 3/4s 5/27/94 6,513,629 2,000,000 Delaware Funding Corp. 3 3/4s 5/24/94 1,995,000 25,000,000 Federal Home Loan Banks 4.34 10/17/94 24,487,639 15,000,000 Federal National Mortgage Assn. 3.34s 6/29/94 14,916,500 15,000,000 Federal National Mortgage Assn. 3.28s 6/23/94 14,926,200 15,000,000 Federal National Mortgage Assn. 3.27s 6/17/94 14,934,600 10,000,000 First Boston Group, Inc. 3.93s 6/27/94 9,935,592 25,000,000 First Boston Group, Inc. 3.74s 5/19/94 24,950,563 50,000,000 Ford Motor Credit Co. 3.73s 6/13/94 49,772,056 11,000,000 General Electric Capital Corp. 3.8s 5/9/94 10,989,550 20,000,000 General Motors Acceptance Corp. 3.9s 5/31/94 19,932,833 20,000,000 General Motors Acceptance Corp. 3.8s 5/9/94 19,981,000 25,000,000 Goldman Sachs Group L.P. 3.65s 5/5/94 24,987,326 20,000,000 Goldman Sachs Group L.P. 3.62s 5/17/94 19,965,811 8,000,000 Goldman Sachs Group L.P. 3.32s 10/3/94 7,884,907 25,000,000 IBM Credit Corp. 3.89s 6/6/94 24,897,347 15,000,000 Merrill Lynch & Co., Inc. 4.1s 7/18/94 14,865,042 15,000,000 Merrill Lynch & Co., Inc. 4s 7/6/94 14,888,333 10,000,000 Merrill Lynch & Co., Inc. 3.8s 6/23/94 9,943,000 5,000,000 Preferred Receivables Funding Corp. 3.65s 5/23/94 4,988,341 35,000,000 Preferred Receivables Funding Corp. 3.65s 5/18/94 34,936,125 8,000,000 Preferred Receivables Funding Corp. 3.65s 5/16/94 7,987,022 30,000,000 Smith Barney Shearson 3.65s 5/18/94 29,945,250 14,500,000 Wachovia Corp. 3.82s 5/19/94 14,707,948 --------------- $721,345,238 COMMERCIAL PAPER(80.8%)(a) (Continued) Principal Amount Value FOREIGN (22.3%)(b) - ------------------------------------------------------------------------------- $ 10,000,000 Abbey National PLC 3.9s 7/21/94 $ 9,911,167 15,000,000 Abbey National PLC 3.56s 7/18/94 14,882,817 25,000,000 ABN-AMRO North America Finance Inc. 3.18s 5/3/94 24,993,375 11,125,000 AES Shady Point Inc. (LOC, Bank of Tokyo) 3.73s 5/4/94 11,120,389 35,000,000 BP Australia Finance 3.64s 5/16/94 34,943,378 9,000,000 Bombardier Capital Inc. (LOC, National Westminster) 3.65s 5/17/94 8,984,488 25,000,000 Commerzbank AG 3.62S 5/11/94 24,972,347 15,000,000 DIC Americas (LOC, Mitsubishi Bank) 3.8s 6/7/94 14,939,833 30,000,000 Fletcher Challenge Finance U.S.A. Inc. (LOC, National Westminster) 3.7s 5/10/94 29,969,167 7,285,000 FPL Fuels, Inc. (LOC, Sumitomo Bank) 3.74s 5/2/94 7,283,486 8,000,000 FPL Fuels, Inc. (LOC, Sumitomo Bank) 3.73s 5/2/94 7,998,342 4,380,000 Hartz 667 Commercial Paper Corp. (LOC, Mitsubishi Bank) 3.27s 7/27/94 4,344,989 11,438,000 MP Funding Corp. (LOC, Credit Suisse) 3.65s 5/2/94 11,435,681 10,000,000 Omnicom Finance (LOC, Swiss Bank) 3.65s 5/12/94 9,987,833 7,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.9s 6/6/94 6,971,183 10,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.7s 5/17/94 9,982,528 10,000,000 Pemex Capital, Inc. (LOC, Swiss Bank) 3.65s 5/4/94 9,995,944 17,119,000 Queensland Alumina Ltd. (LOC, Credit Suisse) 3.85s 5/31/94 17,062,246 15,000,000 Southwest Gas Corp. (LOC, Union Bank of Switzerland) 3.95s 6/14/94 14,925,938 --------------- $274,705,131 --------------- TOTAL COMMERCIAL PAPER (cost $996,050,369) $996,050,369 FLOATING RATE NOTES(6.9%)(a) DOMESTIC (4.9%) - ------------------------------------------------------------------------------- $ 10,000,000 Corporate Asset Funding Co., Inc. 3.681s 5/15/94 $ 9,998,000 15,000,000 Merrill Lynch & Co., Inc. 4.09s 11/28/94 15,000,000 20,000,000 Morgan Guaranty Trust 4s 4/18/95 19,996,000 15,000,000 Student Loan Marketing Assn. 3.95s 7/14/94 15,000,000 --------------- $ 59,994,000 FOREIGN (2.0%)(b) - ------------------------------------------------------------------------------- $ 25,000,000 Abbey National PLC 4.065s 4/27/95 $ 25,000,000 --------------- TOTAL FLOATING RATE NOTES (cost $84,994,000) $ 84,994,000 BANK NOTES (6.3%)(a) DOMESTIC - ------------------------------------------------------------------------------- $ 20,000,000 First National Bank of Boston 4.05s 7/29/94 $ 20,067,500 20,000,000 First National Bank of Boston 4s 7/25/94 20,104,444 20,000,000 Pittsburgh National Bank 4.04s 4/21/95 20,010,320 17,000,000 Pittsburgh National Bank 3.53s 11/4/94 17,265,618 --------------- TOTAL BANK NOTES (cost $77,447,882) $ 77,447,882 U.S. GOVERNMENT AND AGENCY OBLIGATIONS(2.8%)(a) Principal Amount Value - ------------------------------------------------------------------------------- $ 15,000,000 Federal National Mortgage Assn. 4.17s 10/17/94 $ 14,704,625 10,000,000 Federal National Mortgage Assn. 3.22s 6/30/94 9,945,439 10,000,000 Student Loan Marketing Assn. 3.62s 6/30/94 9,999,165 --------------- TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (cost $34,649,229) $ 34,649,229 CERTIFICATES OF DEPOSIT(1.2%)(a)(b)(cost $14,749,944) - ------------------------------------------------------------------------------- $ 15,000,000 Commerzbank AG 3.6s 2/1/95 $ 14,749,944 REPURCHASE AGREEMENT(4.4%)(a)(cost $53,820,000) - ------------------------------------------------------------------------------- $ 53,820,000 Interest in $504,971,000 repurchase agreement dated April 29, 1994 with Kidder Peabody & Co., Inc. due May 2, 1994 with respect to various U.S. Treasury obligations--maturity value of $53,835,922 for an effective yield of 3.55% $ 53,820,000 --------------- TOTAL INVESTMENTS (cost $1,261,711,424)(c) $1,261,711,424 Notes (a) Percentages are based on total net assets of $1,232,613,790, which corres- pond to a net asset value per share of $1.00 for both class A and class B shares. (b) U.S. dollar-denominated. (c) The aggregate identified cost on a tax basis is the same. Rates shown on Floating Rate Notes are the current interest rates on April 30, 1994, which are subject to change based on the terms of the security. Percentage of total net assets invested in foreign countries at April 30,1994: Switzerland 6.4% United Kingdom 4.0 Japan 3.6 Netherlands 3.2 Australia 2.8 The accompanying notes are an integral part of these financial statements.
STATEMENT OF ASSETS AND LIABILITIES April 30, 1994 (Unaudited) ASSETS --------------------------------------------------------------------------------------- Investments in securities, at amortized cost (Note 1) $ 1,261,711,424 --------------------------------------------------------------------------------------- Cash 1,376 --------------------------------------------------------------------------------------- Interest and other receivables 409,914 --------------------------------------------------------------------------------------- Receivable for shares of the Fund sold 10,176,498 --------------------------------------------------------------------------------------- TOTAL ASSETS $ 1,272,299,212 LIABILITIES --------------------------------------------------------------------------------------- Payable for securities purchased $20,010,320 --------------------------------------------------------------------------------------- Payable for shares of the Fund repurchased 18,100,500 --------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 3) 865,804 --------------------------------------------------------------------------------------- Payable for administrative services (Note 3) 5,086 --------------------------------------------------------------------------------------- Payable for investor servicing and custodian (Note 3) 430,803 --------------------------------------------------------------------------------------- Payable for distribution fees (Note 3) 82,417 --------------------------------------------------------------------------------------- Other accrued expenses 190,492 --------------------------------------------------------------------------------------- TOTAL LIABILITIES 39,685,422 --------------------------------------------------------------------------------------- NET ASSETS $ 1,232,613,790 REPRESENTED BY --------------------------------------------------------------------------------------- Paid-in capital (Note 4) $ 1,232,613,790 --------------------------------------------------------------------------------------- Net asset value, offering and redemption price per class A share ($1,049,146,360 divided by 1,049,146,360 shares)* $1.00 --------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($183,467,430 divided by 183,467,430 shares)** $1.00 --------------------------------------------------------------------------------------- * Class A shares are offered at net asset value. ** Class B shares are available only by exchange from class B shares of other Putnam Funds. The applicable contingent deferred sales charge will depend upon the Fund from which you exchanged.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF OPERATIONS Six months ended April 30, 1994 (Unaudited) INTEREST INCOME $ 14,326,430 EXPENSES: --------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 1,512,800 --------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 875,790 --------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 10,355 --------------------------------------------------------------------------------------- Reports to shareholders 20,713 --------------------------------------------------------------------------------------- Auditing 17,458 --------------------------------------------------------------------------------------- Legal 7,078 --------------------------------------------------------------------------------------- Postage 28,058 --------------------------------------------------------------------------------------- Administrative services (Note 2) 7,398 --------------------------------------------------------------------------------------- Registration fees 46,602 --------------------------------------------------------------------------------------- Distribution fees - Class B (Note 2) 170,163 --------------------------------------------------------------------------------------- Other 34,257 --------------------------------------------------------------------------------------- Total expenses 2,730,672 --------------------------------------------------------------------------------------- Net investment income 11,595,758 --------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 42 --------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 11,595,800 ---------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS Six months ended Year ended April 30 October 31 1994* 1993 INCREASE (DECREASE) IN NET ASSETS --------------------------------------------------------------------------------------- OPERATIONS: --------------------------------------------------------------------------------------- Net investment income $ 11,595,758 $ 15,628,626 --------------------------------------------------------------------------------------- Net realized gain on investments 42 1,728 --------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 11,595,800 15,630,354 --------------------------------------------------------------------------------------- Distribution to shareholders from: --------------------------------------------------------------------------------------- Net investment income --------------------------------------------------------------------------------------- Class A (10,789,336) (15,452,211) --------------------------------------------------------------------------------------- Class B (806,422) (176,415) --------------------------------------------------------------------------------------- Net realized gain on investments --------------------------------------------------------------------------------------- Class A (40) (1,713) --------------------------------------------------------------------------------------- Class B (2) (15) --------------------------------------------------------------------------------------- Increase (decrease) from capital share transactions (Note 4) 622,915,832 (232,350,806) --------------------------------------------------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 622,915,832 (232,350,806) NET ASSETS --------------------------------------------------------------------------------------- Beginning of period 609,697,958 842,048,764 --------------------------------------------------------------------------------------- End of period $1,232,613,790 $609,697,958 --------------------------------------------------------------------------------------- * Unaudited
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS* (For a share outstanding throughout the period) Six April 27,1992 Six months (Commencement months ended Year ended of operations to ended April 30 October 31 October 31 April 30 1994** 1993 1992 1994** 1993 - --------------------------------------------------------------------------------------------------------------------------------- Class B Class A - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Investment Income $ .0112 $ .0195 $ .0151 $ .0138 $ .0246 - --------------------------------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain on Investments --- --- --- --- --- - --------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations .0112 .0195 .0151 .0138 .0246 - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions $ (.0112) $ (.0195) $ (.0151) $ (.0138) $ (.0246) - --------------------------------------------------------------------------------------------------------------------------------- Total Investment Return at Net Asset Value (%) (a) 2.24(b) 1.98 2.98(b) 2.78(b) 2.49 - --------------------------------------------------------------------------------------------------------------------------------- Net Assets, End of Period (in thousands) $183,467 $ 22,777 $ 2,864 $1,049,146 $586,920 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of Expenses to Average Net Assets (%) 1.09(b) 1.20 1.37(b) .60(b) .70 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of Net Investment Income to Average Net Assets (%) 2.40(b) 1.98 2.93(b) 2.76(b) 2.48 - --------------------------------------------------------------------------------------------------------------------------------- See page 17 for notes to Financial Highlights.
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS* (continued) (For a share outstanding throughout the period) Ten months ended Year ended October 31 October 31 1992 1991 1990 1989 1988 1987 1986 1985 - --------------------------------------------------------------------------------------------------------------------------------- Class A - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Investment Income $ .0353 $ .0598 $ .0764 $ .0853 $ .0655 $ .0568 $ .0642 $ .0633 - --------------------------------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain on Investments --- .0001 --- --- --- --- --- .0001 - --------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations .0353 .0599 .0764 .0853 .0655 .0568 .0642 .0634 - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions $(.0353) $(.0599) $(.0764) $(.0853) $(.0655) $(.0568) $(.0642) $(.0634) - --------------------------------------------------------------------------------------------------------------------------------- Total Investment Return at Net Asset Value (%) (a) 3.58 6.16 7.92 8.87 6.75 5.83 6.61 7.86(b) - --------------------------------------------------------------------------------------------------------------------------------- Net Assets, End of Period (in thousands) $839,185 $684,987 $904,186 $797,395 $659,590 $775,954 $320,874 $275,901 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of Expenses to Average Net Assets (%) .86 .77 .74 .85 .91 1.01 .89 .85(b) - --------------------------------------------------------------------------------------------------------------------------------- Ratio of Net Investment Income to Average Net Assets (%) 3.56 6.04 7.63 8.51 6.67 5.65 6.32 7.56(b) - --------------------------------------------------------------------------------------------------------------------------------- * Financial Highlights for periods ended through October 31, 1992 have been restated to conform with requirements issued by the SEC in April, 1993. ** Unaudited. (a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Annualized.
NOTES TO FINANCIAL STATEMENTS April 30, 1994 (Unaudited) NOTE 1 SIGNIFICANT ACCOUNTING POLICIES The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund seeks current income consistent with preservation of capital and maintenance of liquidity. The Fund achieves its objective by investing in a portfolio of high-grade short-term obligations. The Fund may invest up to 100% of its assets in the banking indus- try and in commercial paper and short-term corporate obligations of issuers in the personal credit institution and business credit institution industries. The Fund offers both class A and class B shares. The Fund commenced its public offering of class B shares on April 27, 1992. Class A and class B shares are sold without a front-end sales charge. Class B shares are offered only in ex- changes for class B shares of other Putnam funds. They pay an ongoing distri- bution fee, and are subject to a contingent deferred sales charge if the shares are redeemed within six years of purchase (including any holding period of the shares in the other Putnam fund). In addition, the Trustees declare separate di- vidends on each class of shares. Each class bears expenses unique to that class (including the distribution fees applicable to class B shares) and votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the Fund if the Fund were liquidated. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The poli- cies are in conformity with generally accepted accounting principles. A) SECURITY VALUATION The valuation of the Fund's portfolio instruments is de- termined by means of the amortized cost method as set forth in Rule 2a-7 under the Investment Company Act of 1940. The amortized cost of an instrument is de- termined by valuing it at cost originally and thereafter amortizing any dis- count or premium from its face value at a constant rate until maturity. B) JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securi- ties and Exchange Commission the Fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment com- panies managed by Putnam Investment Management, Inc., (Putnam Management) the Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. and cer- tain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. C) REPURCHASE AGREEMENTS The Fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. The Fund's Mana- ger is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D) FEDERAL TAXES It is the policy of the Fund to distribute all of its income within the prescribed time and otherwise comply with the provisions of the In- ternal Revenue Code applicable to regulated investment companies. It is also the intention of the Fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. There- fore, no provision has been made for federal income and excise taxes on income and capital gains. E) INTEREST INCOME AND DIVIDENDS TO SHAREHOLDERS Interest income is recorded on the accrual basis. Income dividends are declared daily by the Fund and are dis- tributed monthly. NOTE 2 MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS Compensation of Putnam Management for management and investment advisory servi- ces is paid quarterly based on the average net assets of the Fund for the quar- ter. Such fee is based on the following annual rates: 0.5% of the first $100 mi- llion of average net assets, 0.4% of the next $100 million, 0.35% of the next $300 million, 0.325% of the next $500 million, and 0.3% of any amount over $1 billion, subject, under current law, to reduction in any year to the extent that expenses (exclusive of brokerage, interest and taxes) of the Fund exceed 2.5% of the first $30 million of average net assets, 2.0% of the next $70 million and 1.5% of any amount over $100 million and by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of the Manager on the Fund's portfolio transactions. The Fund also reimburses the Manager for the compensation and related expenses of certain officers of the Fund and their staff who provide administrative ser- vices to the Fund. The aggregate amount of all such reimbursements is deter- mined annually by the Trustees. For the six months ended April 30, 1994, the Fund paid $7,398 for these services. Trustees of the Fund receive an annual Trustee's fee of $1,340 and an additional fee for each Trustees' meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions are being provided to the Fund by Putnam Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc. Investor servicing agent functions are currently provided by Putnam Investor Services, a division of PFTC. Fees paid for these investor servicing and custodial functions for the six months ended April 30, 1994, amounted to $875,790. Investor servicing and custodian fees reported in the Statement of operations for the six months ended April 30, 1994, have been reduced by credits allowed by PFTC. The Fund has adopted a distribution plan with respect to its class B shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments, Inc. for services provi- ded and expenses incurred by it in distributing class B shares. The Class B Plan provides payments currently limited by the Trustees to .50% of the Fund's avera- ge net assets attributable to class B shares, but may increase with the Trustees approval to an amount not exceeding .75% of average net assets. For the six months ended April 30, 1994, the Fund paid Putnam Mutual Funds Corp. distribu- tion fees of $170,163 for class B shares. A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares purchased as part of an investment of $1 million or more and were acquired by an exchange from another Putnam fund. For the six months ended April 30, 1994, Putnam Mutual Funds Corp., acting as an underwriter, received no mo- nies on such redemptions. Putnam Mutual Funds Corp. also receives the proceeds on the contingent deferred sales charges on its class B share redemptions. The charge is based on declining rates, which begin at 5.00% of the net asset value of the redeemed shares. Putnam Mutual Funds Corp. has informed the fund that it received no monies from redemptions during the six months ended April 30, 1994. NOTE 3 PURCHASES AND SALES OF SECURITIES During the six months ended April 30, 1994, purchases and sales (including matu- rities) of investment securities (all short-term obligations) aggregated $11,549,559,741 and $10,917,101,013, respectively. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis. NOTE 4 CAPITAL SHARES At April 30, 1994, there was an unlimited number of shares of beneficial inte- rest authorized, divided into two classes, designated class A and class B capi- tal stock. Transactions in capital stock were as follows: Six months ended Year ended April 30 October 31 1994 1993 - ------------------------------------------------------------------------------- CLASS A - ------------------------------------------------------------------------------- Shares sold $1,975,737,215 $1,954,667,214 Shares issued in connection with reinvestment of distributions 10,404,284 16,002,778 - ------------------------------------------------------------------------------- 1,986,141,499 1,970,669,992 Shares repurchased (1,523,915,601) (2,222,934,715) - ------------------------------------------------------------------------------- NET INCREASE (DECREASE) $462,225,898 $(252,264,723) - ------------------------------------------------------------------------------- Six months ended Year ended April 30 October 31 1994 1993 - ------------------------------------------------------------------------------- CLASS B - ------------------------------------------------------------------------------- Shares sold $347,543,965 $66,254,392 Shares issued in connection with reinvestment of distributions 717,350 156,162 - ------------------------------------------------------------------------------- 348,261,315 66,410,554 Shares repurchased (187,571,381) (46,496,637) - ------------------------------------------------------------------------------- NET INCREASE $160,689,934 $19,913,917 - ------------------------------------------------------------------------------- OUR COMMITMENT TO QUALITY SERVICE CHOOSE AWARD-WINNING SERVICE Putnam Investor Services has won the DALBAR Quality Tested Service Seal every year since the award's 1990 inception. DALBAR, an independent research firm, ran more than 10,000 tests of 38 shareholder service components. In every category, Putnam outperformed the industry standard. HELP YOUR INVESTMENT GROW You can set up a regular program for investing with as little as $25 a month from a Putnam money market fund or your own bank account.* SWITCH FUNDS EASILY You can move money from one account to another with the same class of shares without a service charge. (This privilege is subject to change or termination.) ACCESS YOUR MONEY EASILY You can get checks sent regularly or redeem shares any business day at the then- current net asset value, which may be more or less than their original cost. Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus. To make an additional investment in this or any other Putnam fund, contact your financial advisor or call our toll-free number: 1-800-225-1581. * Regular investing, of course, does not guarantee a profit or protect against a loss in a declining market. Investors should consider their ability to continue purchasing shares during periods of low price levels. FUND INFORMATION INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES George Putnam, Chairman William Pounds, Vice Chairman Jameson Adkins Baxter Hans H. Estin John A. Hill Elizabeth T. Kennan Lawrence J. Lasser Donald S. Perkins Robert E. Patterson George Putnam, III A.J.C. Smith W. Nicholas Thorndike OFFICERS George Putnam Charles E. Porter President Executive Vice President Patricia C. Flaherty Lawrence J. Lasser Senior Vice President Vice President Gordon H. Silver Gary N. Coburn Vice President Vice President William F. McGue Lindsey M. Callen Vice President Vice President and Fund Manager William N. Shiebler John R. Verani Vice President Vice President Paul M. O'Neil John D. Hughes Vice President Vice President and Treasurer Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Daily Dividend Trust. It may also be used as sales literature when preceded or accompanied by the current prospectus, which gives details of sales charges, investment objectives, and operating policies of the fund. PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, MA 02109 Bulk Rate U.S. Postage Paid Boston, MA Permit No. 53749 010/879-12426 APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Boldface typeface is displayed with capital letters, italic typeface is displayed in normal type. (2) Because the printed page breaks are not reflected, certain tabular and columnar headings and symbols are displayed differently in this filing. (3) Bullet points and similar graphic signals are omitted. (4) Page numbering has been omitted. (5) The trademark symbol has been replaced by (TM). (6) The copyright symbol has been replaced by (C). (7) The dagger symbol has been replaced by (+). -----END PRIVACY-ENHANCED MESSAGE-----